Fiat-Chrysler-General Motors

Where are the Competition Authorities when you need them?

I predict both the expensive EU and the useless UK Competition Authorities will wave through these mega mergers.

It will be bad for jobs, bad for factories, bad for customer choice.

It might even end up as bad for Fiat shareholders as well, but that’s their problem, not mine.

If it works for Fiat it must mean the end of brands, makes, marques, factories and jobs on a big scale.

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11 Comments

  1. alan jutson
    Posted May 4, 2009 at 8:32 am | Permalink

    All sounds a bit like LLoyds TSB taking over HBOS !!!!!!

    Crysler employees Welfare, Health and Pensions cost a fortune.

    Do Fiat get any form of State aid or EU funding ?????

  2. ManicBeancounter
    Posted May 4, 2009 at 8:32 am | Permalink

    I believe, Mr Redwood, that you have analysed the situation wrongly. Fiat propose taking over the European operation of General Motors – a company in dire financial straits. Chrysler is the same. It is not one company trying to take out others to build a monopoly profits through strength – there are too many stronger companies to gain a monopoly presence. Rather, I would suggest, it is a way to gain large state handouts. Such a group would at least get a substantial one-off payment from the US government for Chrysler, along with being “too big to fail” in the European context. Rather than a powerful group exploiting the consumer with huge profit margins, a more apt analogy is like encouraging a teenage girl to have lots of babies as a means of earning a living.

  3. Robert Edwards
    Posted May 4, 2009 at 10:29 am | Permalink

    Anyone who has studied the disastrous relationship between Daimler-Benz and Chrysler does not need to go very far to know exactly how this proposal will end. It will be bad for jobs, it will be bad for the products and ultimately it will be eye-wateringly expensive for the hapless FIAT shareholders.

  4. Glyn H
    Posted May 4, 2009 at 10:38 am | Permalink

    If Mercedes gave up the unequal struggle to make Chrysler viable (was it sensible to try in the first place? And the same goes for BMW/Rover) what on earth does FIAT, who have been frequently on the point of crisis for 50 years think they can do with all these other business? At least Opel/Vauxhall make competent products. Do FIAT? The 500 has been well received, as a retro look fun car, but cloned up as the new KA in no way is it competent to Ford standards – so FIAT seemingly has neither the financial strength not the technical ability to do anything useful. Who is in control of this aggrandising madness? Gordon Brown?

    • Ross Grant
      Posted May 4, 2009 at 7:20 pm | Permalink

      Don’t agree with your analysis of Fiat products. It is not just those badged Fiat but includes Alfa Romeo, Lancia, Maserati, Ferrari. There is a lot of platform sharing, such as MiTo with Grande Punto. The 500 is built on the Panda which is very successful.

      There are a lot of questions to answer but the products aren’t the area to look at.

  5. Pat
    Posted May 4, 2009 at 10:44 am | Permalink

    I see the handling of Chrysler/GM as relatively good but absolutely bad. The formation of American Leyland will reduce the wealth and power of the US, hence improve our position relative to theirs (which I call a relative good), but this will reduce our wealth in absolute terms (absolutely bad). That is it will cost us as well as the Americans, but it will cost them a lot more.
    Absent some secret plan for these companies to produce good cars at a profit all that is being done is to prolong the agony at considerable expense.

  6. Lola
    Posted May 4, 2009 at 1:39 pm | Permalink

    Fiat is a de defacto nationalised company. This is mercantilist behaviour by Italy, or rather by the Italian ruling class. And as someone else has pointed out is probably a device for accessing European bailout ‘social’ type money. And furthermore IMHO Fiat can only successfully make small cars. The whole thing stinks.

  7. mikestallard
    Posted May 4, 2009 at 3:43 pm | Permalink

    Perhaps they ought to be nationalised or subsidised by, say, RBS or HBOS?
    That way they would be safe.
    Wouldn’t they?
    And think of all those votes……

  8. Ross Grant
    Posted May 4, 2009 at 7:29 pm | Permalink

    “If it works for Fiat it must mean the end of brands, makes, marques, factories and jobs on a big scale.”

    Isn’t this unfortunately what needs to happen in the car industry? Hasn’t over capacity been a problem for a while and isn’t structural change needed?

  9. Tim Hedges
    Posted May 5, 2009 at 8:26 am | Permalink

    Ross Grant is right. There are too many people employed in the motor industry and this means loss of jobs and factories.

    Chrysler is a good choice for FIAT which has next to no distribution in the US (Chrysler has next to none in Europe). Also Chrysler has been at least partly cleaned up at the expense of Mercedes.

    As for competition, we still have VW (bigger than the new unit would be), three other Germans and two French as well as the Japs, other Far East and two other Americans. I don’t think this could be referred to the MMC.

  10. Pet Snakes
    Posted May 27, 2009 at 12:19 pm | Permalink

    Thats certainly food for thought, where can I get more information on this?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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